Philly Shipyard signs LOI for two boxships with "blue chip" operator

Ships contemplated by LOI have already started construction and will be the direct continuation of the Aloha Class series that Philly Shipyard is building for Matson

JULY 21, 2017 — Philly Shipyard, Inc. (PSI), a wholly-owned subsidiary of Philly Shipyard ASA (Oslo: PHLY), says it has entered into a Letter of Intent (LOI) with what it describes as "a blue chip U.S. shipping operating company" for the construction and sale of up to four new, cost-efficient and environmentally friendly containerships, with planned deliveries in 2020 and 2021.

The shipbuilder says that the LOI marks the entry into the next phase in the transaction process, building on ongoing discussions between the parties, and that the identity of the shipping operating company is not being disclosed at this time.

Under the terms of the LOI, it is contemplated that the shipping operating company will make an initial order for two 3,700 TEU containerships and receive options to order two additional sister ships. It is intended that these vessels will service the containership trade between the U.S. West Coast and Hawaii.

As we reported June 8, see earlier story, the yard has already begun construction of the vessels contemplated by the LOI in order to support their optimal delivery dates. These vessels are the continuation of the series of two similar 3,600 TEU "Aloha Class" containerships currently under construction at PSI for the Hawaii trade-lane.

The transaction contemplated by the LOI is subject to agreement by the parties on definitive documents and fulfillment of certain closing conditions. The LOI provides for a period of exclusivity to negotiate and complete this transaction.